Home  »  Company  »  NIIT Ltd.  »  Quotes  »  Notes to Account
Enter the first few characters of Company and click 'Go'

Notes to Accounts of NIIT Ltd.

Mar 31, 2015

1 CORPORATE INFORMATION

NIIT is a talent development company which was set up in 1981. NIIT ('the Company') currently offers learning and knowledge solutions across the globe to individuals, enterprises and various institutions.

2. Rights, preferences and restrictions attached to shares:-

Equity Shares: The Company has issued one class of equity shares having a par value of Rs.2/- per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

3. Details of Security given against loans

i) 12% Non Convertible Debentures issued to Life Insurance Corporation of India are secured by way of first charge on pari-passu basis on the immovable and movable fixed assets of the Company.

ii) During the current year, the Company has availed FCY Loan for INR 1000 Million equivalent of USD 16.05 Million from Citi Bank N.A, India Branch, which was simultaneously fully hedged by converting it from the floating rate USD loan into fixed rate INR loan through USD INR Currency Swap at a Spot reference (USD INR) exchange rate of USD 1 = INR 62.30, through full maturity of the loan. The said loan is secured by way of whole of the company's tangible and intangible moveable fixed assets both present and future land and building of the Company at Sector 32, Gurgaon. The necessary formalities to create the security are under process as at the year end, as per the terms of agreement. The rate of interest on fully hedged Equivalent amount of INR 1000 Million is fixed at 10.25% p.a. for the full tenure of the loan. The outstanding balance of earlier Foreign Currency Term loan has been repaid in full during the year.

iii) The Company is in the process of creating charge on assets transferred to Hole-in-the-Wall Education limited in accordance with the scheme of Arrangement

4. Maximum amount due from Directors or Other officers during the year Rs. 0.63 Million (Previous year Rs. 0.88 Million). Amount outstanding at year end Rs. Nil (Previous year Rs. Nil).

5. Short-term Loans and advances include balances with government authorities Rs. 81.34 Million (Previous year Rs. 125.28 Million).

6. CONTINGENT LIABILITIES

As at

1. Claims against the Company not acknowledged as debts:- March 31,2015 March 31,2014

- Customers 6.10 6.10

- Sales Tax/ VAT 2.50 55.07

- Works Contract Tax 31.32 31.32

- Custom Duty 4.70 -

- Service Tax 20.98 20.98

- Income Tax 369.92 313.37

- Others* 12.74 12.74

*Pertains to alleged dues towards provident fund payable by vendors of the Company which the Company is also contesting.

(a) It is not practical for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective proceedings. Management does not forsee any financial implication based on advice of legal counsel.

(b) The Company does not expect any reimbursements in respect of the above.

2. The Company had received Show Cause Notices under section 263 of the Income Tax Act, 1961, issued by the Commissioner of Income Tax for the Assessment years 1999-00 to 2005-06, who later issued Orders directing the Assessing Officer for re-assessment on certain items. Orders passed by the CIT u/s 263 for AY 1999-00 to AY 2005-06 have been challenged by the Company in the Income Tax Appellate Tribunal. The Tribunal has since passed order for AY 1999-00. The Tribunal has decided the issue of assumption of jurisdiction against the Company. On merits, Tribunal has allowed some of the issues and dismissed others which were referred back to the assessing officer for fresh examination and at this stage there are no ascertained/ quantified demands. The Company is filing appeal before the High Court against the aforesaid order of the Tribunal. Based on legal opinion, the Company is confident of obtaining adequate relief before the High Court.

3. Guarantees

i. Guarantees issued by bankers outstanding at the end of the year Rs. 4.50 Million (Previous year Rs. 51.34 Million).

ii. Corporate Guarantee of Rs. 529.85 Million (USD 8.5 Million) [Previous year Rs. 510.50 Million (USD 8.50 Million, net of settlement of USD 2.50 Million)] issued to Skill Soft Corporation, USA & Skill Soft Ireland Limited to secure them against any indemnification obligations of NIIT Ventures Inc. (a step down subsidiary of the Company) and NIIT (USA) Inc., with respect to sale of Element K Corporation (erstwhile step down subsidiary of the Company) in prior year.

iii. Corporate Guarantee given to National Skill Development Corporation to secure loans of Rs. 142.64 Million (Previous year Rs. 142.64 Million) availed by NIIT Yuva Jyoti Limited, a subsidiary of the Company.

4. Other monies for which the company is contingently liable

i. Security given for working capital limits on behalf of NIIT Institute of Finance Banking and Insurance Training Limited Rs. Nil (Previous year Rs.10 Million) [Amount Outstanding at year end Rs. Nil (Previous year Rs. Nil)] and Hole-in-the-Wall Education Limited Rs. 30 Million (Previous year Rs. 21 Million) [Amount Outstanding at year end Rs. Nil (Previous year Rs. 15.63 Million)] and Evolv Services Limited (Amalgamated with NIIT Limited w.e.f. April 1,2014) Rs. Nil (Previous Year Rs. 10 Million) [ Amount Outstanding at year end Rs. Nil (Previous year Rs. Nil)].

ii. Standby Letter of Credit Rs. 467.52 Million (USD 7.5 Million) [Previous year Rs. 450.45 Million (USD 7.5 Million)] issued for working capital limits in favour of NIIT (USA) Inc., USA, a subsidiary of the Company by earmarking working capital facility of NIIT Limited.

7. CAPITAL AND OTHER COMMITMENTS

(a) Estimated amount of contracts remaining to be executed on capital account (net of advances) not provided for Rs. 12.83 Million (Previous year Rs. 14.29 Million).

(b) For commitments related to lease arrangements, refer Note 41.

(c) The company has issued a letter of support to provide need based financial support to its subsidiaries Hole-in-the-Wall Education Limited, NIIT Institute of Finance Banking and Insurance Training Limited, NIIT Yuva Jyoti Limited, NIIT Antilles NV, Netherlands Antilles and NIIT Limited-UK.

(d) Commitment to support NIIT Institute of Information Technology to meet the shortfall, if any, in repayment of loan taken by it from a bank.

(e) For commitment in respect of non-disposal of investment in subsidiary, refer note 11 [footnotes (i) and (ii)].

8. Defined Benefit Plans

I. Provident Fund

The Company makes contribution to the "NIIT LIMITED EMPLOYEES' PROVIDENT FUND TRUST" ("the Trust"), which is a defined benefit plan. The Company contributed Rs. 20.42 Million (Previous year Rs. 27.90 Million) including Rs. 1.51 Million (Previous year Rs. 0.31 Million) in respect of Key Managerial personnel during the year to the Trust.

The Company has an obligation to make good the shortfall, if any, between the return from the investments of the Trust and the notified interest rate. The Company's obligation in this regard is actuarially determined and provided for if the circumstances indicate that the Trust may not be able to generate adequate returns to cover the interest rates notified by the Government.

The guidance on implementing AS 15 Employee Benefits (revised 2005), issued by Accounting Standards Board (ASB) of The Institute of Chartered Accountants of India, states that benefits involving employer established provident fund trust, which require interest shortfall to be compensated by the employer is required to be considered as Defined Benefits Plans. The actuary has provided a valuation and based on the below mentioned assumptions, determined that there is no short fall as at year end.

The details of fund and plan assets of the Trust are as follows (limited to the extent provided by the actuary):

9. EMPLOYEES STOCK OPTION SCHEME

During the year 2005-06, the Company had established NIIT Employee Stock Option Plan 2005 "ESOP 2005" and the same was approved at the General Meeting of the Company held on May 18, 2005. The plan was set up so as to offer and grant, for the benefit of employees (excluding promoters) of the Company, who are eligible under "Securities and Exchange Board of India (SEBI) (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999", options of the Company in one or more tranches, and on such terms and conditions as may be fixed or determined by the Board, in accordance with the provisions of law or guidelines issued by the relevant authorities in this regard.

As per the plan, each option is exercisable for one equity share of face value of Rs. 2/- each (Rs. 10/- each pre bonus and split) fully paid up on payment to the Company, at a price to be determined in accordance with ESOP 2005. ESOP information is given for the number of shares after sub-division and Bonus issue.

(i) During the year, NIIT (USA) Inc., USA a wholly owned overseas subsidiary of the Company, has bought back 6.50 Million (Previous year 7.00 Million) equity shares from the Company for a consideration of USD 1.01 per share based on a valuation carried out by an independent valuer. The difference in the fair value and the book value of shares aggregating to Rs. 111.86 Million (Previous year Rs. 124.22 Million) has been recognised as an exceptional income in the financial statements. NIIT (USA) Inc., USA continues to be a wholly owned subsidiary post this transaction. Further, in view of consistent improvement in financial performance of NIIT (USA) Inc. USA, strong order book and financial projections, the Company has written back the provision for diminution, other than temporary, in value of investments amounting to Rs. 398.42 Million.

(ii) Pursuant to the Scheme of Arrangement (Refer Note 31), the Company has transferred the School Business Undertaking to its wholly owned subsidiary company, Hole-in-the-Wall Education Limited, for a consideration of Rs. 1,080.64 Million against a net book value of Rs. 1,053.19 Million. The difference between consideration and book value amounting to Rs. 27.45 Million has been credited to Statement Profit and Loss. Further, expenditure incurred in relation to the Scheme of Arrangement amounting to Rs. 40.45 Million has been charged to the Statement of Profit and Loss.

(iii) The Company has made a provision of Rs. 44.57 Million towards Value added tax basis ongoing proceedings with the concerned authorities in respect of customer contracts executed in earlier years.

(iv) During the year, the company has made a provision for diminution, other than temporary, in value of investment amounting to Rs. 855.16 Million and Rs. 210.00 Million for the investment made in wholly owned subsidiaries, NIIT Antilles NV, Netherlands Antilles and Hole-in-the-Wall Education Limited respectively, based on future business direction, cash generating capabilities and revised business plans.

(v) Owing to significant delays in collections, persistent follow up and management's defocus from government and other contracts, the Company has made one time provision in respect of receivable balance from the customers of Rs. 185.31 Million (Previous year Rs. Nil).

(vi) During the year, the Company has completed transition from physical mode of courseware delivery to Cloud and Collaborative Delivery Model. On account of change in delivery technology, the Company has made provision for inventory aggregating to Rs. 3.21 Million (Previous year Rs. 24.20 Million) lying with the Company and made provision for business support amounting to Rs. 39.77 Million (Previous year Rs. 80.84 Million) as one time credit to eligible business partners.

(vii) Pursuant to slow down in IT training business the Company has made a provision for impairment of intangibles which is included in Note 10 under Fixed assets.

10. Scheme of Arrangement

The Board of Directors have at its meeting held on August 26, 2014 approved a Composite Scheme of Arrangement ('the Scheme') between the Company and its erstwhile subsidiaries Scantech Evaluation Services Limied ('SESL'), Evolv Services Limited ('ESL'), NIIT Online Learning Limited ('NOLL') (also, collectively referred to as 'the amalgamating companies') and Hole-in-the-Wall Education Limited ('HiWEL' or 'the transferee company') and their respective shareholders and creditors under sections 391 to 394 of the Companies Act, 1956, for streamlining of the group structure, consolidation of business operations and reduction in costs. SESL is engaged in the business of making investment into shares and securities of other companies/ body corporates, ESL is in the business of providing training to corporate customers in areas of professional life and NOLL is in the business of online learning through use of web-based technologies. The transferee company is involved in research and development activities involving elementary education and life skills of children. Pursuant to the Scheme, the amalgamating companies stand transferred to and vest with the Company and the School Business Undertaking of the Company, as defined in the Scheme ('the Undertaking'), stands transferred to the transferee company for a lumpsum consideration of Rs. 1,080.64 Million retrospectively with effect from April 1, 2014 ('the appointed date'). The Scheme has been approved by the shareholders and the Hon'ble High Court of Judicature at Delhi ('the Hon'ble High Court') on January 31,2015 and May 8, 2015 respectively. The Scheme came into effect upon filing of the order of the Hon'ble High Court with the Registrar of Companies on May 23, 2015 ('the effective date').From the effective date, the amalgamating companies stand dissolved without being wound up and their business continues to be carried out by the Company.

11. In respect of amalgamation of amalgamating companies

Pursuant to the Scheme, the businesses of the amalgamating companies, together with all the properties, assets, rights, liabilities and interest therein, stand transferred to and vest in the Company, as a going concern, with effect from April 1,2014 and the business of the amalgamating companies is carried out for and on account of and in trust by the Company. The authorised share capital of the Company stands increased by an amount of Rs. 636 Million.

The amalgamation is accounted for using 'Purchase' method as set out in Accounting Standard (AS) 1 4 Accounting for Amalgamations.

In accordance with the Scheme all the assets and liabilities as on the appointed date, of the amalgamating companies become the assets and liabilities of the Company and were recorded at fair values in the books of the Company based on a report of an independent valuer and the difference between the fair value of assets and liabilities of the amalgamating companies were credited to Capital Reserve Account after adjusting inter- company balances as approved by the Board of Directors in their meeting held on July 17, 2015*.

12. RELATED PARTY TRANSACTIONS AS PER ACCOUNTING STANDARD 18:

A. Related party relationship where control exists:

Subsidiaries

1 NIIT Online Learning Limited (Amalgamated with NIIT Limited w.e.f. April 1,2014)

2 Hole-in-the-Wall Education Limited

3 Scantech Evaluation Services Limited (Amalgamated with NIIT Limited w.e.f. April 1,2014)

4 NIIT Yuva Jyoti Limited

5 NIIT Institute of Finance Banking and Insurance Training Limited

6 NIIT Institute of Process Excellence Limited

7 Evolv Services Limited (Amalgamated with NIIT Limited w.e.f. April 1,2014)

8 NIIT Limited, UK

9 NIIT Antilles NV, Netherlands Antilles

10 NIIT Malaysia Sdn. Bhd, Malaysia

11 NIIT GC Limited, Mauritius

12 NIIT China (Shanghai) Limited, Shanghai, China

13 NIIT Wuxi Service Outsourcing Training School, China

14 Chongqing NIIT Education Consulting Limited, China

15 Wuxi NIIT Information Technology Consulting Limited, China

16 Changzhou NIIT Information Technology Consulting Limited, China

17 Su Zhou NIIT Information Technology Consulting Limited, China

18 NIIT (USA) Inc., USA

19 NIIT Ventures Inc., USA (Amalgamated with NIIT (USA) Inc., USA w.e.f. December 1,2014)

20 PT NIIT Indonesia, Indonesia (Under liquidation)

21 NIIT West Africa Limited, Nigeria

22 Qingdao NIIT Information Technology Company Limited, China

23 Chongqing An Dao Education Consulting Limited, China

24 Zhangjiagang NIIT Information Services Limited, China

25 Chengmai NIIT Information Technology Company Limited, China

B. Other related parties with whom the Company has transacted:

a) Associates (Parties in which Company has substantial interest)

1 NIIT Technologies Limited

2 NIIT GIS Limited

3 NIIT Smart Serve Limited

b) Key Managerial Personnel

1 Rajendra S Pawar (Chairman)

2 Vijay K Thadani (Vice-Chairman & Managing Director)

3 P Rajendran (Joint Managing Director)

c) Relatives of Key Managerial Personnel

1 Renuka Thadani (Wife of Vijay K Thadani)

2 Veena Oberoi (Sister of Vijay K Thadani)

d) Parties in which the Key Managerial Personnel of the Company are interested

1 NIIT Institute of Information Technology

2 NIIT Foundation (formerly known as NIIT Education Society)

3 NIIT University

4 Pace Industries Private Limited

5 NIIT Network Services Limited

6 Naya Bazaar Novelties Private Limited

Footnotes:-

i) Previous year figures are given in parenthesis.

ii) Includes Purchase of Goods from:

Naya Bazaar Novelties Pvt. Limited Rs. 0.48 Million (Previous year Rs. 0.59 Million)

Hole-in-the-Wall Education Limited Rs. 0.05 Million (Previous year Rs. 0.03 Million)

NIIT Yuva Jyoti Limited Rs. Nil (Previous year Rs. 2.80 Million)

NIIT Foundation Rs. Nil (Previous year Rs. 0.76 Million)

iii) Includes Sale of Goods to:

NIIT Yuva Jyoti Limited Rs. Nil (Previous year Rs. 0.43 Million)

iv) Includes Purchase of Fixed Assets (including services received for development of intangible assets) from:

NIIT (USA) Inc. Rs. Nil (Previous year Rs. 11.51 Million)

NIIT Yuva Jyoti Limited Rs. Nil (Previous year Rs. 0.48 Million)

v) Includes Sale of Fixed Assets to:

NIIT Institute of Finance, Banking & Insurance Training Limited Rs. 0.44 Million (Previous year Rs. Nil) NIIT Institute of Information Technologies Rs. 0.05 Million (Previous year Rs. Nil)

NIIT Yuva Jyoti Limited Rs. Nil (Previous year Rs. 0.93 Million)

vi) Includes sale of Services to:

NIIT (USA) Inc. Rs. 810.14 Million (Previous year Rs. 792.96 Million)

NIIT Antilles NV, Netherlands Antilles Rs. 21.54 Million (Previous year Rs. 18.73 Million)

NIIT Limited, UK Rs. 208.92 Million (Previous year Rs. 108.66 Million)

NIIT Technologies Limited Rs. 2.01 Million (Previous year Rs. Nil)

NIIT Institute of Process Excellence Limited Rs. 4.18 Million (Previous year Rs. 5.81 Million)

Hole-In-The-Wall Education Limited Rs. 0.09 Million (Previous year Rs. Nil)

NIIT GIS Limited Rs. 0.08 Million (Previous year Rs. Nil)

NIIT Malaysia, Sdn, Bhd Rs. 0.76 Million (Previous year Rs. Nil)

NIIT University Rs. 1.29 Million (Previous year Rs. 2.27 Million)

NIIT Institute of Finance Banking and Insurance Training Limited Rs. 12.31 Million (Previous year Rs. 10.73 Million) NIIT Smart Serve Limited Rs. 0.03 Million (Previous year Rs. Nil)

vii) Includes Purchase of services-Employee Cost from:

NIIT Institute of Process Excellence Limited Rs. 0.71 Million (Previous year Rs. Nil)

NIIT University Rs. 0.36 Million (Previous year Rs. Nil)

Evolv Services Limited Rs. Nil (Previous year Rs. 1.75 Million)

viii) Includes Purchase of services- Professional and Technical Outsourcing Expense from:

NIIT University Rs. 4.77 Million (Previous year Rs. 11.53 Million)

Evolv Services Limited Rs. Nil (Previous year Rs. 22.40 Million)

NIIT Institute of Finance Banking and Insurance Training Limited Rs. 7.26 Million (Previous year Rs. 0.90 Million) NIIT Institute of Process Excellence Limited Rs. 11.19 Million (Previous year Rs. 12.57 Million)

NIIT USA Inc. Rs. 11.11 Million (Previous year Rs. 3.73 Million)

ix) Includes Purchase of services- Others from:

NIIT Institute of Process Excellence Limited Rs. 0.81 Million (Previous year Rs. Nil)

NIIT Yuva Jyoti Limited Rs. 10.98 Million (Previous year Rs. Nil)

NIIT Technologies Limited Rs. 19.92 Million (Previous year Rs. 19.77 Million)

NIIT University Rs. 2.38 Million (Previous year Rs. 0.20 Million)

NIIT Network Services Limited Rs. 0.14 Million (Previous year Rs. Nil)

NIIT Limited, UK Rs. 1.64 Million (Previous year Rs. Nil)

x) Includes Recovery from subsidiaries for Management Services:

NIIT Antilles N.V Rs. 11.60 Million (Previous year Rs. 12.73 Million)

NIIT Institute of Finance Banking and Insurance Training Limited Rs. 16.23 Million (Previous year Rs. 16.82 Million) NIIT Institute of Process Excellence Limited Rs. 5.65 Million (Previous year Rs. 4.29 Million)

NIIT (USA) Inc. Rs. 8.93 Million (Previous year Rs. 5.27 Million)

NIIT Yuva Jyoti Limited Rs. 10.03 Million (Previous year Rs. 6.64 Million)

NIIT Limited, UK Rs. 3.42 Million (Previous year Rs. 1.69 Million)

Hole-In-The-Wall Education Limited Rs. 75.63 Million (Previous year Rs. 0.34 Million)

NIIT Malaysia, Sdn, Bhd Rs. 0.03 Million ( Previous year Rs. Nil)

xi) Includes Recovery of Employee Benefit Expenses from:

NIIT University Rs. 8.63 Million (Previous year Rs. 15.32 Million)

NIIT Institute of Finance Banking and Insurance Training Limited Rs. 0.54 Million (Previous year Rs. 0.20 Million) NIIT Yuva Jyoti Limited Rs. 0.13 Million ( Previous year Rs. 0.72 Million)

Hole-In-The-Wall Education Limited Rs. 0.01 Million (Previous year Rs. 0.02 Million)

NIIT Institute of Process Excellence Limited Rs. 0.03 Million (Previous year Rs. 0.03 Million)

NIIT Technologies Limited Rs. 0.20 Million (Previous year Rs. 0.29 Million)

NIIT Foundation Rs. 0.04 Million (Previous year Rs. Nil)

xii) Includes Recovery of Professional technical and outsourcing expenses from:

Hole-In-The-Wall Education Limited Rs. 0.01 Million (Previous year Rs. Nil)

NIIT Institute of Finance Banking and Insurance Training Limited Rs. 0.02 (Previous year Rs. 0.03 Million)

NIIT Yuva Jyoti Limited Rs. 0.02 Million (Previous year Rs. Nil)

NIIT Institute of Process Excellence Limited Rs. 0.01 Million (Previous year Rs. Nil)

xiii) Includes Recovery of other Expenses from:

NIIT Institute of Finance Banking and Insurance Training Limited Rs. 39.00 Million (Previous year Rs. 30.23 Million) NIIT (USA) Inc. Rs. 12.40 Million (Previous year Rs. 10.64 Million)

NIIT Yuva Jyoti Limited Rs. 10.96 Million (Previous year Rs. 8.47 Million)

Hole-In-The-Wall Education Limited Rs. 30.43 Million (Previous year Rs. 1.59 Million)

NIIT Antilles N.V Rs. 0.39 Million (Previous year Rs. 0.06 Million)

NIIT Institute of Process Excellence Limited Rs. 2.07 Million (Previous year Rs. 1.97 Million)

NIIT University Rs. 4.43 Million (Previous year Rs. 2.39 Million)

NIIT Limited, UK Rs. 11.69 Million (Previous year Rs. 0.16 Million)

NIIT Technologies Limited Rs. 3.89 Million (Previous year Rs. 5.00 Million)

NIIT Foundation Rs. 2.58 Million (Previous year Rs. 1.06 Million)

NIIT GIS Limited Rs. 0.03 Million (Previous year Rs. 0.40 Million)

NIIT Smart Serve Limited Rs. 0.01 Million (Previous year Rs. Nil)

xiv) Includes Recovery of Employee benefit Expenses by:

NIIT University Rs. Nil (Previous year Rs. 0.42 Million)

xv) Includes Recovery of Professional technical and outsourcing expenses by:

NIIT Limited UK Rs. 83.17 Million (Previous year Rs. 51.90 Million)

xvi) Includes Recovery of other Expenses by:

NIIT Institute of Finance Banking and Insurance Training Limited Rs. 6.78 Million (Previous year Rs. 8.81 Million) NIIT (USA) Inc. Rs. 8.62 Million (Previous year Rs. 12.67 Million)

Renuka Thadani Rs. 1.09 Million (Previous year Rs. 0.99 Million)

Veena Oberoi Rs. 0.73 Million (Previous year Rs.0.66 Million)

NIIT Limited, UK Rs. Nil (Previous year Rs. 5.02 Million)

NIIT University Rs. 11.04 Million (Previous year Rs. Nil)

NIIT Foundation Rs. 0.28 Million (Previous year Rs. Nil)

Pace Industries Pvt. Ltd. Rs. 0.73 Million (Previous year Rs. 0.66 Million)

xvii) Includes Royalty paid to:

NIIT Institute of Finance Banking and Insurance Training Limited Rs. 1.91 Million (Previous year Rs. 4.17 Million) Evolv Services Limited Rs. Nil (Previous year Rs. 0.37 Million)

xviii) Represents Investments made in:

NIIT Antilles N.V Rs. 404.56 Million (Previous year Rs. Nil)

NIIT Yuva Jyoti Limited Rs. Nil (Previous year Rs. 101.70 Million)

xix) Represents Investments received back from:

NIIT (USA) Inc.,USA Rs. 403.36 Million (Previous year Rs. 439.80 Million)

xx) Loans Given relates to:

NIIT Institute of Finance, Banking & Insurance Training Limited Rs. 45.00 Million (Previous year Rs. Nil) Hole-In-The-Wall Education Limited Rs. 54.70 Million (Previous year Rs. Nil) [Footnote (ii) ]

NIIT Foundation Rs. Nil (Previous year Rs. 1.00 Million)

xxi) Loans Given Received Back relates to:

NIIT Foundation Rs. Nil (Previous year Rs. 1.00 Million)

xxii) Inter Corporate Deposits Taken from:

Scantech Evaluation Services Limited Rs. Nil (Previous year Rs. 199.00 Million)

xxiii) Repayment of inter Corporate Deposits taken:

Scantech Evaluation Services Limited Rs. Nil (Previous year Rs. 175.50 Million)

xxiv) interest income from:

Hole-in-the-Wall Education Limited Rs. 5.43 Million (Previous year Rs. 3.49 Million)

NIIT Institute of Finance, Banking & Insurance Training Limited Rs. 0.02 Million (Previous year Rs. Nil) NIIT Foundation Rs. Nil (Previous year Rs. 0.08 Million)

xxv) interest Expenditure includes:

Scantech Evaluation Services Limited Rs. Nil (Previous year Rs. 16.30 Million)

xxvi) Remuneration to:

Rajendra S Pawar Rs. 4.38 Million (Previous year Rs. 2.64 Million)

Vijay K Thadani Rs. 5.37 Million (Previous year Rs. 2.69 Million)

P Rajendran Rs. 20.53 Million (Previous year Rs. 2.73 Million)

xxvii) Other income includes:

NIIT Antilles NV, Netherlands Antilles Rs. 25.99 Million (Previous year Rs. 43.58 Million)

NIIT Institute of Finance Banking and Insurance Training Limited Rs. Nil (Previous year Rs. 1.07 Million)

xxviii) Dividend income includes:

NIIT Technologies Limited Rs. 130.44 Million (Previous year Rs. Nil)

Scantech Evaluation Services Limited Rs. Nil (Previous year Rs. 103.06 Million)

NIIT (USA) Inc., USA Rs. Nil (Previous year Rs. 327.91 Million)

xxix) Provision for Doubtful Debts and Advances

Hole-in-the-Wall Education Limited Rs. Nil (Previous year Rs. 3.14 Million)

xxx) Recovery of Corporate Guarantee Charges

NIIT USA Inc. Rs. 2.65 Million (Previous year Rs. Nil)

NIIT Yuva Jyoti Limited Rs. 0.71 Million (Previous year Rs. Nil)

xxxi) Payment of Guarantee & Collaterals

Hole-in-the-Wall Education Limited Rs. 8.92 Million (Previous year Rs. Nil)

13. Previous year figures have been regrouped/ reclassified to conform the current year classification. Figures for the previous years are not comparable pursuant to the effect of the Scheme as stated in Note 31.


Mar 31, 2014

1. Details of Security Given against Loans.

i) 12% Non Convertible Debentures issued to Life Insurance Corporation of India are secured by way of first charge on pari-passu basis on the immovable and movable fixed assets of the Company. During the year'' the Company has redeemed 11.25% non-convertible debentures at par. The charge in respect of such debentures is pending to be vacated as at year end.

ii) Foreign Currency Term loan is secured by way of first charge on pari-passu basis on Company''s tangible and intangible moveable fixed assets both present and future. The rate of interest on the loan is LIBOR with the margin of 2.2%.

2. TAXATION

(a) Upon finalisation of Income Tax Return of financial year ended March 31'' 2013 an amount of Rs. 0.60 Million (Previous year Rs. 13.18 Million) has been charged to the Statement of Profit and Loss.

3. CONTINGENT LIABILITIES (Rs. Million)

1. Claims against the Company not acknowledged as debts:- As at

March 31'' 2014 March 31'' 2013

- Customers 6.10 5.80

- Sales Tax/ VAT 55.07 44.57

- Works Contract Tax 31.32 31.32

- Service Tax 20.98 20.98

- Income Tax 313.37 293.39

- Others* 12.74 -

*Pertains to alleged dues towards provident fund payable by vendors of the Company which the company is also contesting.

(a) It is not practical for the Company to estimate the timings of cash outflows'' if any'' in respect of the above pending resolution of the respective proceedings. Management does not forsee any financial implication based on advise of legal counsel.

(b) The Company does not expect any reimbursements in respect of the above.

2. The Company had received Show Cause Notices under section 263 of the Income Tax Act'' 1961'' issued by the Commissioner of Income Tax for the Assessment years 1999-00 to 2005-06 ''who later issued Orders directing the Assessing Officer for re-assessment on certain items. The quantum of Income Tax demand'' if any'' has neither been quantified nor ascertained and thus'' indeterminable at this stage. These orders have been challenged by the Company in the Income Tax Appellate Tribunal. Based on legal opinion obtained by the Company'' the Company is confident that the matter as above shall be decided in its favour.

3. Guarantees

i. Guarantees issued by bankers outstanding at the end of the year Rs. 51.34 Million (Previous year Rs. 74.38 Million).

ii. Corporate Guarantee of Rs. 510.50 Million (USD 8.50 Million'' net of settlement of USD 2.5 Million) [Previous year Rs. 597.13 Million (USD 11 Million)] issued to Skill Soft Corporation'' USA & Skill Soft Ireland Limited to secure them against any indemnification obligations of NIIT Ventures Inc. (a step down subsidiary of the Company) and NIIT (USA) Inc.'' with respect to sale of Element K Corporation (erstwhile step down subsidiary of the Company).

iii. Corporate Guarantee given to National Skill Development Corporation to secure the loan of Rs. 142.64 Million (Previous year Rs. 79.64 Million) availed by NIIT Yuva Jyoti Limited '' subsidiary of the Company.

4. Other money for which the company is contingently liable

i. Security given for working capital limits on behalf of Evolve Services Limited Rs. 10 Million (Previous year Rs. 10 Million) [Amount outstanding at year end Rs. Nil (Previous year Rs. 2.47 Million)]'' NIIT Institute of Finance Banking and Insurance Training Limited Rs. 10 Million (Previous year Rs.10 Million) [Amount outstanding at year end Rs. Nil (Previous year Rs. Nil)] and Hole-in-the-Wall Education Limited Rs. 21 Million (Previous year Rs. 21 Million) [Amount Outstanding at year end Rs. 15.63 Million (Previous year Rs. 17.66 Million)].

ii. Standby Letter of Credit Rs. 450.45 Million (USD 7.5 Million) [Previous year Rs. Nil] issued for working capital limits issued to NIIT (USA) Inc.'' USA a subsidiary of the company by earmarking working capital facility of NIIT Limited.

4. CAPITAL AND OTHER COMMITMENTS

(a) Estimated amount of contracts remaining to be executed on capital account (net of advances) not provided for Rs. 14.29 Million (Previous year Rs. 18.66 Million).

(b) For commitments related to lease arrangements'' refer Note 40.

(c) There are certain contracts with State Governments under which the Company is required to transfer ownership of the fixed assets and equipments under leasing arrangement at the written down value (which will be nil)'' at the end of the contract term.

(d) The company has issued a letter of support to provide need based financial support to its subsidiaries Hole-in-the-Wall Education Limited and NIIT Yuva Jyoti Limited.

(e) Commitment to support NIIT Institute of Information Technology to meet the shortfall'' if any'' in repayment of loan taken by it from a bank.

(f) For commitment in respect of non-disposal of investment in subsidiary'' refer note 11 [footnotes (i) and (ii)].

23.1 Includes interest income for the previous year amounting to Rs. 25.52 Million (Previous year Rs. 21.56 Million).

5. EMPLOYEE BENEFITS

A) Defined Contribution Plans

The Company makes contribution towards Superannuation Fund and Pension Scheme to the defined contribution plans for eligible employees.

The Company has charged the following costs in the Statement of Profit and Loss under "Employee Benefits Expense" in Note 24:-

B) Defined Benefit Plans

I. Provident Fund

The Company makes contribution to the "NIIT LIMITED EMPLOYEES'' PROVIDENT FUND TRUST" ("the Trust")'' which is a defined benefit plan. The Company contributed Rs. 27.90 Million (Previous year Rs. 30.33 Million) including Rs. 0.31 Million (Previous year Rs. 1.00 Million) in respect of Key Managerial personnel during the year to the Trust.

The Company has an obligation to make good the shortfall'' if any'' between the return from the investments of the Trust and the notified interest rate. The Company''s obligation in this regard is actuarially determined and provided for if the circumstances indicate that the Trust may not be able to generate adequate returns to cover the interest rates notified by the Government.

The guidance on implementing AS 15 Employee Benefits (revised 2005)'' issued by Accounting Standards Board (ASB) of The Institute of Chartered Accountants of India'' states that benefits involving employer established provident fund trust'' which require interest shortfall to be compensated by the employer is required to be considered as Defined Benefits Plans. The actuary has provided a valuation and based on the below mentioned assumptions'' determined that there is no short fall as at March 31'' 2014.

The details of fund and plan assets of the Trust are as follow (limited to the extent provided by the actuary):

Estimates of future salary increase considered in actuarial valuation'' take account of inflation'' seniority'' promotion and other relevant factors'' such as supply and demand in the employment market.

vi) Investment details of Plan Assets:-

The plan assets are maintained with Life Insurance Corporation of India Gratuity Scheme. The details of investment maintained by Life Insurance Corporation of India are not available with the Company and have not been disclosed.

The expected return on plan assets is determined considering several applicable factors mainly the composition of plan assets held'' assessed risk of asset management'' historical result of the return on plan assets.

6. EMPLOYEES STOCK OPTION SCHEME

During the year 2005-06'' the Company had established NIIT Employee Stock Option Plan 2005 "ESOP 2005" and the same was approved at the General Meeting of the Company held on May 18'' 2005. The plan was set up so as to offer and grant'' for the benefit of employees (excluding promoters) of the Company'' who are eligible under "Securities and Exchange Board of India (SEBI) (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines'' 1999"'' options of the Company in one or more tranches'' and on such terms and conditions as may be fixed or determined by the Board'' in accordance with the provisions of law or guidelines issued by the relevant authorities in this regard.

As per the plan'' each option is exercisable for one equity share of face value of Rs. 2/- each (Rs. 10/- each pre bonus and split) fully paid up on payment to the Company'' at a price to be determined in accordance with ESOP 2005. ESOP information is given for the number of shares after sub-division and Bonus issue.

(i) During the year'' NIIT (USA) Inc.'' a wholly owned overseas subsidiary of the Company'' has bought back 7 Million equity shares from the Company for a consideration of USD 1.01 per share based on a valuation carried out by an independent valuer. The difference in the fair value and the book value of shares aggregating to Rs 124.22 Million has been recognised as an exceptional income in the financial statements. NIIT (USA) Inc. continues to be a wholly owned subsidiary post this transaction.

(ii) The Company realised an amount of Rs. 38.91 Million during the previous year against the provision made in the earlier years in respect of dues from government and other customers which was reported as an exceptional item in earlier year. Therefore'' the amount of provision was written back and reported as an exceptional item in the previous year.

(iii) During the previous year'' the Company paid an amount of Rs. 36.99 Million towards variable compensation as additional incentive on account of profits earned from the sale of step down erstwhile subsidiary Element K Corporation'' USA'' which was reported as an exceptional item in an earlier year.

(iv) During the year'' the Company has significantly transitioned from physical mode of courseware delivery to Cloud and Collaborative Delivery Model. On account of change in delivery technology'' the Company has made provision for inventory aggregating to Rs. 24.20 Million lying with the Company and made provision for business support amounting to Rs. 80.84 Million as one time credit to business partners.

7. RELATED PARTY TRANSACTIONS AS PER ACCOUNTING STANDARD 18:

A. Related party relationship where control exists: Subsidiaries

1 NIIT Online Learning Limited

2 Hole-in-the-Wall Education Limited

3 Scantech Evaluation Services Limited

4 NIIT Yuva Jyoti Limited

5 NIIT Institute of Finance Banking and Insurance Training Limited

6 NIIT Institute of Process Excellence Limited

7 Evolve Services Limited

8 NIIT Limited'' UK

9 NIIT Antilles N V'' Netherlands Antilles

10 NIIT Malaysia Sdn. Bhd'' Malaysia

11 NIIT GC Limited'' Mauritius

12 NIIT China (Shanghai) Limited'' Shanghai'' China

13 NIIT Wuxi Service Outsourcing Training School'' China

14 Chongqing NIIT Education Consulting Limited'' China

15 Wuxi NIIT Information Technology Consulting Limited'' China

16 Changzhou NIIT Information Technology Consulting Limited'' China

17 Su Zhou NIIT Information Technology Consulting Limited'' China

18 NIIT (USA) Inc.'' USA

19 NIIT Ventures Inc.'' USA

20 PT NIIT Indonesia'' Indonesia (Under liquidation)

21 NIIT West Africa Limited'' Nigeria

22 Qingdao NIIT Information Technology Company Limited'' China (w.e.f. May 14'' 2012)

23 Chongqing An Dao Education Consulting Limited'' China (w.e.f. June 5'' 2012)

24 Zhangjiagang NIIT Information Services Limited'' China (w.e.f. September 1'' 2012)

25 Chengmai NIIT Information Technology Company Limited'' China (w.e.f December 19'' 2012)

B. Other related parties with whom the Company has transacted:

a) Associates (Parties in which Company has substantial interest)

1 NIIT Technologies Limited

2 NIIT GIS Limited

3 NIIT Smart Serve Limited

b) Key Managerial Personnel

1 Rajendra S Pawar (Chairman and Managing Director)

2 Vijay K Thadani (Chief Executive Officer and Whole-time Director)

3 P Rajendran (Chief Operating Officer and Whole-time Director)

c) Relatives of Key Managerial Personnel

1 Renuka Thadani (Wife of Vijay K Thadani)

2 Veena Oberoi (Sister of Vijay K Thadani)

d) Parties in which the Key Managerial Personnel of the Company are interested

1 NIIT Institute of Information Technology

2 NIIT Foundation (formerly known as NIIT Education Society)

3 NIIT University

4 Pace Industries Private Limited

5 NIIT Network Services Limited

Footnotes:-

i) Previous year figures are given in parenthesis. ii) Includes Purchase of Goods from:

Evolve Services Limited Rs. Nil (Previous year Rs. 2.07 Million)

Hole-in-the-Wall Education Limited Rs. 0.03 Million (Previous year Rs. 1.86 Million)

NIIT Institute of Finance Banking and Insurance Training Limited Rs. Nil (Previous year Rs. 1.86 Million)

NIIT Yuva Jyoti Limited Rs. 2.80 Million (Previous year Rs. Nil)

NIIT Foundation Rs. 0.76 Million (Previous year Rs. Nil)

iii) Includes Sale of Goods to:

NIIT Yuva Jyoti Limited Rs. 0.43 Million (Previous year Rs. 0.91 Million) NIIT Foundation Rs. Nil (Previous year Rs. 0.16 Million)

iv) Includes Purchase of Fixed Assets (including services received for development of intangible assets) from:

NIIT (USA) Inc. Rs. 11.99 Million (Previous year Rs. 39.52 Million)

v) Includes Sale of Fixed Assets to:

NIIT Yuva Jyoti Limited Rs. 0.93 Million (Previous year Rs. Nil)

vi) Includes sale of Services to:

NIIT (USA) Inc. Rs. 792.96 Million (Previous year Rs. 750.28 Million)

NIIT Antilles N V'' Netherlands Antilles Rs. 18.73 Million (Previous year Rs. 70.34 Million)

NIIT Limited'' UK Rs. 108.66 Million (Previous year Rs. 85.75 Million)

NIIT Technologies Limited Rs. Nil (Previous year Rs. 2.31 Million)

NIIT Institute of Finance Banking and Insurance Training Limited Rs. 10.73 Million (Previous year Rs. 7.68 Million)

vii) Includes Purchase of services-Employee Cost from:

Evolve Services Limited Rs. 1.75 Million (Previous year Rs. 1.29 Million)

viii) Includes Purchase of services- Professional and Technical Outsourcing Expense from:

NIIT University Rs. 11.53 Million (Previous year Rs. Nil)

Evolve Services Limited Rs. 22.40 Million (Previous year Rs. 21.08 Million)

NIIT Institute of Process Excellence Limited Rs. 12.57 Million (Previous year Rs. 12.73 Million)

NIIT USA Inc. Rs. 3.73 Million (Previous year Rs. 7.23 Million)

NIIT Limited'' UK Rs. Nil (Previous year Rs. 23.70 Million)

ix) Includes Purchase of services- Others from:

NIIT Technologies Limited Rs. 19.77 Million (Previous year Rs. Nil) NIIT Smart Serve Limited Rs. Nil (Previous year Rs. 2.42 Million) NIIT (USA) Inc. Rs. 0.20 Million (Previous year Rs. 2.92 Million)

x) Includes Recovery from subsidiaries for Management Services:

NIIT Antilles N.V. Rs. 12.73 Million (Previous year Rs. 12.79 Million)

NIIT Institute of Finance Banking and Insurance Training Limited Rs. 16.82 Million (Previous year Rs. 13.45 Million)

NIIT Institute of Process Excellence Limited Rs. 4.29 Million (Previous year Rs. 4.30 Million)

NIIT (USA) Inc. Rs. 5.27 Million (Previous year Rs. 7.07 Million)

NIIT Yuva Jyoti Limited Rs. 6.64 Million ( Previous year Rs. 6.01 Million)

xi) Includes Recovery of Employee Benefit Expenses from:

NIIT University Rs. 15.32 Million (Previous year Rs. Nil)

NIIT Institute of Finance Banking and Insurance Training Limited Rs. 0.20 Million (Previous year Rs. 0.30 Million)

NIIT Yuva Jyoti Limited Rs. 0.72 Million ( Previous year Rs. 1.64 Million)

xii) Includes Recovery of Professional technical and outsourcing expenses from:

NIIT Institute of Finance Banking and Insurance Training Limited Rs. 0.03 Million (Previous year Rs. Nil)

xiii) Includes Recovery of other Expenses from:

NIIT Institute of Finance Banking and Insurance Training Limited Rs. 30.23 Million (Previous year Rs. 24.62 Million)

NIIT (USA) Inc. Rs. 10.64 Million (Previous year Rs. 6.94 Million)

NIIT Yuva Jyoti Limited Rs. 8.08 Million ( Previous year Rs. 9.14 Million)

NIIT University Rs. 2.39 Million (Previous year Rs. 12.01 Million)

NIIT Technologies Limited Rs. 5.00 Million (Previous year Rs. 9.60 Million)

xiv) Includes Recovery of Employee benefit Expenses by:

NIIT University Rs. 0.42 Million (Previous year Rs. Nil)

NIIT Institute of Finance Banking and Insurance Training Limited Rs. Nil (Previous year Rs. 0.70 Million)

xv) Includes Recovery of Professional technical and outsourcing expenses by:

NIIT Limited UK Rs. 51.90 Million (Previous year Rs. Nil) NIIT (USA) Inc. Rs. Nil (Previous year Rs. 2.50 Million)

xvi) Includes Recovery of other Expenses by:

NIIT Institute of Finance Banking and Insurance Training Limited Rs. 8.81 Million (Previous year Rs. 7.13 Million)

NIIT (USA) Inc. Rs. 12.67 Million (Previous year Rs. 18.18 Million)

NIIT Limited'' UK Rs. 5.02 Million ( Previous year Rs. Nil)

NIIT Technologies Limited Rs. Nil (Previous year Rs. 23.80 Million)

xvii)Includes Royalty paid to:

NIIT Institute of Finance Banking and Insurance Training Limited Rs. 4.17 Million (Previous year Rs. 2.41 Million) Evolve Services Limited Rs. 0.36 Million (Previous year Rs. 1.20 Million)

xviii)Represents Investments made in:

NIIT Yuva Jyoti Limited Rs. 101.70 Million (Previous year Rs. 27.00 Million)

xix) Represents Investments received back from:

NIIT (USA) Inc.''USA Rs. 439.80 Million (Previous year Rs. Nil)

xx) Loans Given relates to:

NIIT Institute of Information Technology Rs. Nil (Previous year Rs. 25.00 Million) NIIT Foundation Rs. 1.00 Million (Previous year Rs. 3.00 Million)

xxi) Loans Given Received Back relates to:

NIIT Foundation Rs. 1.00 Million (Previous year Rs. 3.00 Million)

NIIT Institute of Information Technology Rs. Nil (Previous year Rs. 25.00 Million)

Evolv Services Limited Rs. Nil (Previous year Rs. 6.75 Million)

xxii)Inter Corporate Deposits Taken from:

Scantech Evaluation Services Limited Rs. 199.00 Million (Previous year Rs. 175.50 Million)

xxiii) Repayment of Inter Corporate Deposits taken:

Scantech Evaluation Services Limited Rs. 175.50 Million (Previous year Rs. 158.10 Million)

xxiv) Interest Income from:

Hole-in-the-Wall Education Limited Rs. 3.49 Million (Previous year Rs. 3.49 Million) NIIT Institute of Information Technology Rs. Nil (Previous year Rs 0.53 Million) NIIT Foundation Rs. 0.08 Million (Previous year Rs. 0.16 Million)

xxv) Interest Expenditure includes:

Scantech Evaluation Services Limited Rs. 16.30 Million (Previous year Rs. 15.63 Million)

xxvi) Remuneration to:

Rajendra S Pawar Rs. 2.64 Million (Previous year Rs.6.14 Million) Vijay K Thadani Rs. 2.69 Million (Previous year Rs. 9.70 Million) P Rajendran Rs. 2.73 Million (Previous year Rs. 6.31 Million)

xxvii) Other Income includes:

NIIT Antilles N V'' Netherlands Antilles Rs. 43.58 Million (Previous year Rs. 58.59 Million)

NIIT Institute of Finance Banking and Insurance Training Limited Rs. 1.07 Million (Previous year Rs. 2.16 Million)

NIIT Institute of Information Technology Rs. Nil (Previous year Rs. 0.21 Million)

xxviii) Dividend Income includes:

Scantech Evaluation Services Limited Rs. 103.06 Million (Previous year Rs. 186.31 Million) NIIT (USA) Inc. Rs. 327.91 Million (Previous year Rs. 283.71 Million)

xxix) Provision for Doubtful Debts and Advances

Hole-in-the-Wall Education Limited Rs. 3.14 Million (Previous year Rs. 4.13 Million)

8. SEGMENT INFORMATION

Primary Segment Information – Business Segment

The sub businesses are fully aligned to global learning business of the Company and the same are being viewed by the management as a single primary segment'' i.e. learning business segment.

b) Finance Leases:

i. Assets acquired under finance lease comprise intangibles (Contents/ Products). There are no exceptional/ restrictive covenants in the lease agreement.

9. Derivative Instruments

a) The Company has taken currency and interest rate swap to hedge the currency and interest rate risk in respect of foreign currency term loan for the entire tenure of the loan. The interest rate has been fully hedged at a fixed rate of 11% p.a.

10. Previous year figures have been reclassified to conform the current year classification.


Mar 31, 2012

1. CORPORATE INFORMATION

NIIT is a global talent development company which was set up in 1981. NIIT ('the Company') currently offers learning and knowledge solutions across globe to Individuals, Enterprises and Institutions in information Technology, Business Process Outsourcing, Banking Finance and Insurance, Executive Management Education, School Education, Communication & Professional Life Skills and Vocational Skills Training.

2. Rights, preferences and restrictions attached to shares

Equity Shares: The Company has one class of equity shares having a par value of Rs.2/ - per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

3. Details of Security Given Against Loans

i) 12% Non Convertible Debentures issued to Life Insurance Corporation of India and 11.25% Non Convertible Debentures issued to Indian Overseas Bank are secured by way of first charge on pari-passu basis on the immovable and movable fixed assets of the Company. The Company had maintained sufficient asset cove- to discharge the principal amount of these debentures at all times during the financial year 2011-12.

ii) Rupee Term Loan was secured by exclusive charge by hypothecation of specific movable fixed assets and receivables/ deferred recoverable relating to specific school projects. During the current financial year, the loan has been repaid in full to the lender and the related securities have subsequently been released.

4. Terms of Repayment

(i) 12% Non Convertible Debentures to Life Insurance Corporation of India amounting to Rs. 500 Million are redeemable at par as follows:

(i) During the year, the Company has purchased balance shares in Evolv Services Limited from its other shareholders for a consideration of Rs. 20.63 Million. Consequently, Evolv Services Limited has become a wholly owned subsidiary of the Company

(ii) During the year, the Company has made further investment of Rs. 30 Million (Previous year Rs. 15 Million) in the equity shares of Rs. 10 each in its subsidiary company NIIT Institute of Process Excellence limited.

(iii) During the current year, NIIT Yuva Jyoti Limited ("NYJL") was incorporated on May 25, 2011 and certificate for commencement of business was granted on June 18, 2011. Investment of Rs. 79.49 Million was made by the Company in the equity shares of NYJL with a face value of Rs. 10 each. This initial shareholding can not be sold, pledged or otherwise encumbered wholly or in part for a period of four years.

(iv) The Company is required to continue to hold a minimum of 51% of the total paid-up Equity Share Capital of NIIT Yuva Jyoti Limited (NYJL), during the term of the agreement with National Skill Development Corporation (NSDC).

5. TAXATION

(a) Upon finalisation of Income Tax Return of Assessment year 2011-12 an amount of Rs. 0.40 Million (Net) (Previous year Rs. 3.15 Million) has been charged to the Statement of Profit and Loss for the current year

6. During the year the Company has given a loan of Rs. 15 Million (Previous year Rs. 20 Million) to NIIT Institute of Information Technology. NIIT Institute of Information Technology has repaid this amount during the year and there is no loan outstanding as on March 31, 2012

7. CONTINGENT LIABILITIES

(a) Claims against the Company not acknowledged as debts Rs. 9.2 Million (Previous year Rs. 14.2 Million)

(b) Guarantees

i. Guarantees issued by bankers outstanding at the end of accounting year Rs. 464.91 Million (Previous year Rs. 21.08 Million).

ii. Corporate Guarantee Rs. Nil [USD Nil (net of payment of USD Nil)] given to ICICI Bank, Bahrain on behalf of NIIT (USA) Inc., USA (Previous year Rs. 621.60 Million [USD 14 Million (net of payment of USD 29.50 Million)]).

iii. Corporate Guarantee Rs Nil [USD Nil (loan outstanding USD Nil)] (Previous year Rs. 732.60 Million [USD 16.50 Million (loan outstanding USD 15 Million)]) given to ICICI Bank UK PLC, UK on behalf of NIIT (USA) Inc.,USA.

iv. Corporate Guarantee of Rs.559.57 Million (USD 11 Million) has been issued by the Company during the current financial year to SkillSoft Corporation, USA & SkillSoft Ireland Limited to secure them against any indemnification obligations of NIIT Ventures Inc. (a step down subsidiary of the Company) and NIIT (USA) Inc., with respect to sale of certain assets of Element K Corporation (a step down subsidiary of the Company), and Stock sale of Element K Corporation by NIIT Ventures Inc.,USA.

v. Corporate Guarantee of Rs. 79.64 Million given to National Skill Development Corporation to secure the loan of Rs. 79.64 Million availed by NIIT Yuva Jyoti Limited, Subsidiary of the Company.

(c) Other money for which the company is contingently liable

i. Letter of Credit issued by bankers on behalf of the Company outstanding at the end of accounting year Rs. Nil (Previous year Rs. 24.17 Million)

ii. Stand by Letter of Credit of Rs Nil [USD Nil] (Previous year Rs. 244.20 Million [USD 5.50 Million]) from BNP Paribas in favor of Bank of West, USA on behalf of Element K Corporation, USA

iii. Security given for working capital limits on behalf of Evolv Services Limited Rs. 10 Million (Previous year Rs. 10 Million) [Amount outstanding at year end Rs 6.43 Million (Previous year Rs. 9.77 Million)], NIIT Institute of Finance Banking and Insurance Training Limited Rs. 10 Million (Previous year Rs.10 Million) [Amount Outstanding at year end Rs. Nil (Previous year Rs. Nil)] and Hole-in-the-Wall Education Limited of Rs 20 Million (Previous year Rs.10 Million) [Amount Outstanding at year end Rs. 16.70 Million (Previous year Rs. 8.01 Million)].

iv. Andhra Pradesh works contract tax Rs. 101.96 Million (Previous year Rs.91.84 Million). Management does not foresee any financial implication based on the advice of the legal consultant.

v. Service Tax demand amounting to Rs. 10.49 Million (Previous year Rs. 10.49 Million) and equal amount of penalty i.e. Rs. 10.49 Million (Previous year Rs. 10.49 Million) raised by Commissioner of Service Tax, Delhi. Management does not foresee any financial implication based on the advice of the legal consultant.

vi. Income Tax demand for Rs. 230.77 Million (Previous year Rs.157.60 Million). Management does not foresee any financial implication based on the advice of the legal consultant.

vii. Service Tax liability on rental of immovable properties amounting to Rs. Nil (Previous year Rs. 12.07 Million).

viii.The Company had received Show Cause Notices u/s 263 of the Income Tax Act, 1961, issued by the Commissioner of Income Tax for the Assessment years 1999-00 to 2005-06 ,who later issued Orders directing the Assessing Officer for re-assessment on certain items. The quantum of Income Tax demand, if any, has neither been quantified nor ascertained and thus, indeterminable at this stage. These orders have been challenged by the Company in the Income Tax Appellate Tribunal, which has directed the Income Tax department to produce all records related to assessment for perusal of the Tribunal. Against the order of the Tribunal, the Income Tax Department has preferred a writ petition in the High Court at Delhi. The matter is under adjudication in the High Court. Based on legal opinion obtained by the Company, the Company is confident that the matter as above shall be decided in its favour.

8. CAPITAL AND OTHER COMMITMENTS

(a) Estimated amount of contracts remaining to be executed on capital account (net of advances) not provided for Rs. 193.82 Million (Previous Year Rs. 281.99 Million).

(b) For commitments related to lease arrangements, refer Note 40.

(c) There are certain contracts with State Governments under which the Company is required to transfer ownership of the fixed assets and equipments under leasing arrangement at the written down value (which will be nil), at the end of the contract term.

(d) The company has issued a letter of support to provide need based financial support to its subsidiaries NIIT Institute of Finance Banking and Insurance Training Limited and Hole-in-the-Wall Education Limited.

(e) Commitment to support NIIT Institute of Information Technology to meet the shortfall, if any, in repayment of loan taken by it from a bank.

(f) For commitment in respect of non-disposal of investment in subsidiary, refer note 11 (footnote iv).

B) Defined Benefit Plans

I. Provident Fund

The Company makes contribution to the "NIIT LIMITED EMPLOYEES' PROVIDENT FUND TRUST" ("the Trust"), which is a defined benefit plan. The Company contributed Rs. 34.88 Million (Previous year Rs. 27.67 Million) including Rs. 1.99 Million (Previous year Rs. 1.85 Million) in respect of Key Managerial personnel during the year to the Trust.

The Company has an obligation to make good the shortfall, if any, between the return from the investments of the Trust and the notified interest rate. The Company's obligation in this regard is actuarially determined and provided for if the circumstances indicate that the Trust may not be able to generate adequate returns to cover the interest rates notified by the Government.

The guidance on implementing AS 15 Employee Benefits (revised 2005), issued by Accounting Standards Board (ASB) of The Institute of Chartered Accountants of India, states that benefits involving employer established provident fund trust, which require interest shortfall to be compensated by the employer is required to be considered as Defined Benefits Plans. The Actuarial Society of India has issued the final guidance for measurement of Provident Fund liability during the year ended March 31, 2012 basis which the actuary has provided a valuation and based on the below mentioned assumptions, determined that there is no short fall as at March 31, 2012.

The details of fund and plan assets of the Trust as at March 31, 2012 (as provided by the actuary):

vi) Investment details of Plan Assets:-

The plan assets are maintained with Life Insurance Corporation of India Gratuity Scheme. The details of investment maintained by Life Insurance Corporation of India are not available with the Company and have not been disclosed.

The expected return on plan assets is determined considering several applicable factors mainly the composition of plan assets held, assessed risk of asset management, historical result of the return on plan assets.

9. EMPLOYEES STOCK OPTION SCHEME

During the year 2005-06, the Company had established NIIT Employee Stock Option Plan 2005 "ESOP 2005" and the same was approved at the General Meeting of the Company held on May 18, 2005. The plan was set up so as to offer and grant, for the benefit of employees (excluding promoters) of the Company, who are eligible under "Securities and Exchange Board of India (SEBI) (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999", options of the Company in aggregate up to 1,925,000 options under ESOP 2005, in one or more tranches, and on such terms and conditions as may be fixed or determined by the Board, in accordance with the provisions of law or guidelines issued by the relevant authorities in this regard.

As per the plan, each option is exercisable for one equity share of face value of Rs. 2/ - each (Rs. 10/ - each pre bonus and split) fully paid up on payment to the Company, at a price to be determined in accordance with ESOP 2005. ESOP information is given for the number of shares after sub-division and Bonus issue.

(i) Net profit on the sale of the step down subsidiary Element K Corporation, USA, reflected in the consolidated financial statement of the Company, comprises the excess of sale consideration over the net asset of the subsidiary less costs incurred in connection with the sale which included inter-alia performance linked incentive amounting to Rs. 28.90 Million, included in the Profit on Sale of Investments in Subsidiary for the current year.

During the previous year, the Company had sold its investment of 10,950,000 fully paid up Equity Shares of Rs. 10/- each in its wholly owned subsidiary, Neo Multimedia Limited (Formerly known as NIIT Multimedia Limited) for a consideration of Rs. 317.58 Million (net of expenses). The amount of Rs. 208.08 Million was recognised as Profit on Sale of Investment which resulted in an increase in profit before tax during the previous year.

(ii) During the year, the Company received a dividend of Rs. 1,277.38 Million from its subsidiary NIIT (USA) Inc., USA upon sale of Element K Corporation, USA, a step down subsidiary of NIIT (USA) Inc., USA.

(iii)Provision for doubtful debts comprises provision made in respect of dues from government and other customers aggregating to Rs. 247.43 Million.

(iv)Service tax on Rent represents amounts provided by the Company in respect of landlords who have not claimed service tax on rent on their immovable property given on lease. In view of the recent decisions of Honorable High Courts of Delhi, Mumbai & Chennai, these amounts have been provided for.

(v) Due to losses in its subsidiary, Hole-in-the-Wall Education Limited, the Company has made a provision aggregating to Rs. 29.70 Million for Loans, Rs. 10.50 Million in respect of carrying value of investment in the subsidiary. Further an amount of Rs. 6.21 Million has been provided in respect of Advances given to Hole-in- the-Wall Education Limited.

(vi)During the year the Company has contributed an amount of Rs. 62.50 Million (Previous Year Rs. 72.00 Million) towards donations in the corpus of The NIIT Institute of Information Technology, a society registered under the Societies Registration Act, 1860 which is within the overall limits approved by the shareholders.

10 RELATED PARTY TRANSACTIONS AS PER ACCOUNTING STANDARD 18:

A. Related party relationship where control exists:

Subsidiaries

1 NIIT Online Learning Limited

2 Hole-in-the-Wall Education Limited

3 Scantech Evaluation Services Limited

4 NIIT Yuva Jyoti Limited (w.e.f. May 25, 2011)

5 NEO Multimedia Limited (Formerly known as NIIT Multimedia Limited) (Till March 30, 2011)

6 NIIT Institute of Finance Banking and Insurance Training Limited

7 NIIT Institute of Process Excellence Limited

8 Evolv Services Limited

9 NIIT Limited, UK

10 NIIT Antilles NV, Netherlands Antilles

11 NIIT Malaysia Sdn. Bhd, Malaysia

12 NIIT GC Limited, Mauritius

13 NIIT China (Shanghai) Limited, Shanghai

14 NIIT Wuxi Service Outsourcing Training School

15 Chongqing NIIT Education Consulting Limited, China

16 Wuxi NIIT Information Technology Consulting Limited.

17 Changzhou NIIT Information Technology Consulting Limited

18 Su Zhou NIIT Information Technology Consulting Limited

19 PCEC NIIT Institute of Information Technology, Shanghai- (already liquidated)

20 NIIT (USA) Inc., USA

21 NIIT Ventures Inc., USA

22 Element K Corporation, USA (ceased to be subsidiary company w.e.f. October 14, 2011)

23 Element K India Private Limited, India (ceased to be subsidiary company w.e.f. October 14, 2011)

24 Element K (UK) Limited, United Kingdom (ceased to be subsidiary company w.e.f. October 14, 2011)

25 Element K, Canada (ceased to be subsidiary company w.e.f. October 14, 2011)

26 PT NIIT Indonesia, Indonesia (Under liquidation)

27 NIIT West Africa Limited, Nigeria (w.e.f April 1, 2011)

B. Other related parties with whom the Company has transacted:

a) Associates (Parties in which Company has substantial interest)

1. NIIT Technologies Limited

2. NIIT GIS Limited

3. NIIT Smart Serve Limited

b) Key Managerial Personnel

1. Rajendra S Pawar (Chairman and Managing Director)

2. Vijay K Thadani (Chief Executive Officer and Whole-time Director)

3. P Rajendran (Chief Operating Officer and Whole-time Director)

c) Relatives of Key Managerial Personnel

1. Renuka Thadani (Wife of Vijay K Thadani)

2. Veena Oberoi (Sister of Vijay K Thadani)

d) Parties in which the Key Managerial Personnel of the Company are interested

1. NIIT Institute of Information Technology

2. NIIT Education Society

3. Pace Industries Private Limited

4. NIIT Network Services Limited

Footnotes:-

i) Previous year figures are given in parenthesis.

ii) Includes Purchase of Goods from:

NIIT (USA) Inc. Rs. 2.77 Million (Previous year Rs. 19.49 Million)

Evolv Services Limited Rs. Nil (Previous year Rs. 5.40 Million)

Hole-in-the-Wall Education Limited Rs. 2.46 Million (Previous year Rs. 3.60 Million)

NIIT Institute of Finance Banking and Insurance Training Limited Rs. 5.18 Million (Previous year Rs. 0.63 Million) NIIT Institute of Process Excellence Limited Rs. 1.49 Million (Previous year Rs. 0.72 Million )

iii) Includes Sale of Goods to:

NIIT Institute of Information Technology Rs. 1.03 Million (Previous year Rs. 2.87 Million)

NIIT Institute of Finance Banking and Insurance Training Limited Rs. 0.27 Million (Previous year Rs. 1.54 Million) NIIT Technologies Limited Rs. 0.02 Million (Previous year Rs. 1.89 Million)

NIIT Antilles NV, Netherlands Antilles Rs. 0.64 Million (Previous year Rs.Nil)

iv) Includes Purchase of Fixed Assets from:

NIIT (USA) Inc. Rs. 14.71 Million (Previous year Rs. 21.64 Million)

Evolv Services Limited Rs. Nil (Previous year Rs. 0.64 Million)

NIIT Technologies Limited Rs. Nil (Previous year Rs. 0.56 Million)

NIIT Institute of Process Excellence Limited Rs. 2.43 Million (Previous year Rs. 0.48 Million )

v) Includes Sale of Fixed Assets to:

NIIT Technologies Limited Rs. 1.03 Million (Previous year Rs. 0.06 Million)

NIIT Institute of Information Technology Rs. Nil (Previous year Rs. 4.19 Million)

NIIT (USA) Inc. Rs. 252.40 Million (Previous year Rs. Nil)

vi) Includes Rendering of Services to:

NIIT (USA) Inc. Rs. 617.73 Million (Previous year Rs. 446.94 Million)

NIIT Antilles NV, Netherlands Antilles Rs. 273.02 Million (Previous year Rs.186.64 Million )

NIIT Limited, UK Rs. 102.67 Million (Previous year Rs. 38.61 Million)

NIIT Technologies Limited Rs. 5.39 Million (Previous year Rs. 26.29 Million)

Evolv Services Limited Rs. Nil (Previous year Rs. 0.49 Million)

NIIT Institute of Finance Banking and Insurance Training Limited Rs. 9.44 Million (Previous year Rs. 10.21 Million)

vii) Includes Receiving of Services from:

NIIT (USA) Inc. Rs. 9.96 Million (Previous year Rs. 24.62 Million)

NIIT GIS Limited Rs. 1.17 Million (Previous year Rs. 0.37 Million)

NIIT Smart Serve Limited, Rs. 14.33 Million (Previous year Rs. 20.55 Million)

Evolv Services Limited Rs. 23.33 Million (Previous year Rs. 13.73 Million)

NIIT Limited, UK Rs. Nil (Previous year Rs.48.90 Million)

NIIT Institute of Finance Banking and Insurance Training Limited Rs. 9.73 Million (Previous year Rs. 10.49 Million) NIIT Institute of Process Excellence Limited Rs. 10.23 Million (Previous year Rs. 5.01 Million)

viii) Includes Recovery of Expenses from:

Hole-in-the-Wall Education Limited Rs. 4.27 Million (Previous year Rs. 2.37 Million)

NIIT (USA) Inc. Rs. 42.99 Million (Previous year Rs. 1.08 Million)

NIIT Institute of Finance Banking and Insurance Training Limited Rs. 19.23 Million (Previous year Rs. 11.62 Million)

NIIT Technologies Limited Rs. 10.30 Million (Previous year Rs. 10.71 Million)

NIIT GIS Limited Rs. 2.01 Million (Previous year Rs. 1.81 Million)

NIIT Institute of Information Technology Rs. 14.38 Million (Previous year Rs. 9.35 Million)

NIIT Institute of Process Excellence Limited Rs. 1.44 Million (Previous year Rs. 0.60 Million)

ix) Includes Recovery of Expenses by:

NIIT Technologies Limited Rs. 10.43 Million (Previous year Rs. 9.39 Million)

NIIT (USA) Inc. Rs. 19.59 Million (Previous year Rs. 3.03 Million)

NIIT Limited, UK Rs. 43.55 Million (Previous year Rs. Nil)

x) Represents Investments made in:

NEO Multimedia Limited (formerly known as NIIT Multimedia Limited) Rs. Nil (Previous year Rs. 7.00 Million) NIIT Institute of Process Excellence Limited Rs. 30.00 Million (Previous year Rs. 15.00 Million)

NIIT Yuva Jyoti Limited Rs. 79.49 Million. (Previous year Rs. Nil)

xi) Loans Given relates to:

NEO Multimedia Limited (formerly known as NIIT Multimedia Limited) Rs. Nil (Previous year Rs. 3.20 Million) NIIT (USA) Inc. Rs. 36.71 Million (Previous year Rs. 251.19 Million)

NIIT Institute of Information Technology Rs. 15.00 Million (Previous year Rs. 20.00 Million)

Evolv Services Limited Rs. 6.75 Million (Previous year Rs. 15.50 Million)

NIIT Institute of Process Excellence Limited Rs. 17.50 Million (Previous year Rs. 15.00 Million)

xii) Loans Given Received Back relates to:

NIIT (USA) Inc. Rs. 146.57 Million (Previous year Rs. 215.89 Million)

NIIT Education Society Rs. Nil (Previous year Rs. 3.50 Million)

NIIT Institute of Information Technology Rs. 15.00 Million (Previous year Rs. 460.03 Million)

Evolv Services Limited Rs.15.50 Million (Previous year Rs. Nil)

NIIT Institute of Process Excellence Limited Rs. 32.50 Million (Previous year Rs. Nil)

NIIT Institute of Finance Banking and Insurance Training Limited Rs. 26.00 Million (Previous year Rs. Nil)

xiii) Loans/ Inter Corporate Deposits Taken from:

Scantech Evaluation Services Limited Rs. 127.00 Million (Previous year Rs. 115.50 Million)

xiv) Repayment of Loans/ Inter Corporate Deposits taken:

Scantech Evaluation Services Limited Rs. 116.50 Million (Previous year Rs. 91.50 Million)

xv)Interest Income from:

NIIT (USA) Inc. Rs. 5.89 Million (Previous year Rs. 15.88 Million)

Hole-in-the-Wall Education Limited Rs. 3.60 Million (Previous year Rs. 4.34 Million)

NEO Multimedia Limited (formerly known as NIIT Multimedia Limited) Rs. Nil (Previous year Rs. 0.13 Million) NIIT Education Society Rs. Nil (Previous year Rs. 0.06 Million)

Evolv Services Limited Rs. 2.09 Million (Previous year Rs. 0.12 Million)

NIIT Institute of Information Technology Rs. 0.47 Million (Previous year Rs 49.63 Million)

NIIT Institute of Finance Banking and Insurance Training Limited Rs. 1.53 Million (Previous year Rs. 3.06 Million)

NIIT Institute of Process Excellence Limited Rs. 2.31 Million (Previous year Rs. 0.19 Million)

xvi) Interest Expenditure includes:

Scantech Evaluation Services Limited Rs. 14.34 Million (Previous year Rs. 11.69 Million )

xvii) Includes transactions for the year with:

Rajendra S Pawar Rs. 15.16 Million (Previous year Rs.10.04 Million)

Vijay K Thadani Rs. 30.80 Million (Previous year Rs. 16.32 Million)

P Rajendran Rs. 22.66 Million (Previous year Rs. 10.84 Million)

xviii) Other Expenses includes:

Renuka Thadani Rs. 1.00 Million (Previous year Rs. 0.72 Million)

Veena Oberoi Rs. 0.66 Million (Previous year Rs. 0.43 Million)

Pace Industries Private Limited Rs. 0.66 Million (Previous year Rs. 0.43 Million)

NIIT Institute of Information Technology Rs.62.50 Million (Previous year Rs. 71.50 Million)

xix) Other Income includes:

NIIT (USA) Inc. Rs. 10.03 Million (Previous year Rs. 6.78 Million)

NIIT Antilles NV, Netherlands Antilles Rs. 91.24 Million (Previous year Rs. 85.61 Million)

NIIT Institute of Finance Banking and Insurance Training Limited Rs. 11.22 Million (Previous year Rs. 17.04 Million) NIIT Institute of Information Technology Rs. Nil (Previous year Rs. 0.87 Million)

NIIT Institute of Process Excellence Limited Rs.3.80 Million (Previous year Rs. 7.89 Million)

NIIT Limited, UK Rs. 1.29 Million (Previous year Rs. 0.95 Million)

Hole-in-the-Wall Education Limited Rs. 1.08 Million (Previous year Rs.1.01 Million)

xx) Dividend Income includes:

Scantech Evaluation Services Limited Rs. Nil (Previous year Rs. 83.24 Million)

NIIT (USA) Inc. Rs. 1,277.38 Million (Previous year Rs. Nil)

xxi)Provision for Doubtful Debts and Advances includes:

Hole-in-the-Wall Education Limited Rs. 8.95 Million (Previous year Rs. Nil)

xxii) Guarantees and Collaterals:

NIIT Institute of Finance Banking and Insurance Training Limited Rs.10.00 Million (Previous year Rs. Nil) Hole-in-the-Wall Education Limited Rs. 20.00 Million (Previous year Rs. 3.00 Million)

NIIT (USA) Inc. Rs. 559.57 Million (Previous year Rs. 732.60 Million)

Evolv Services Limited Rs. 10 Million (Previous year Rs. Nil)

NIIT Yuva Jyoti Limited Rs. 79.64 Million (Previous year Nil)

The Aggregate Depreciation charged on the above assets during the year is Rs. 0.52 Million (Previous year Rs. 0.52 Million)

Sub lease receipts recognised in the statement of Profit and Loss for the year amounting to Rs. 0.50 Million (Previous year Rs. Nil)

b) Finance Leases:

i. Assets acquired under finance lease comprise of Plant & Machinery, Furniture & Fixtures and Software. There are no exceptional/ restrictive covenants in the lease agreements.

ii. The minimum lease payment outstanding and their present value at the Balance Sheet date in respect of assets that have been capitalised are as follows:

11 The financial statements for the year ended March 31, 2011 had been prepared as per the then applicable, pre-revised Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended March 31, 2012 are prepared as per Revised Schedule VI. Accordingly, the Previous year figures have also been reclassified to conform to this year's classification. The adoption of Revised Schedule VI for Previous year figures does not impact recognition and measurement principles followed for preparation of financial statements except for accounting for dividend on investments in subsidiaries.(Refer Note 2.2)

 
Subscribe now to get personal finance updates in your inbox!